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U.S. beef exports still red hot while pork exports lag

Demand for U.S. beef continues to climb in nearly every region of the world.

Dec 11, 2018

U.S. beef exports remained on a record-shattering value pace in October, according to data released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF). October pork exports trended seasonally higher compared to recent months but were still below the results posted in October 2017.

October beef exports totaled 117,838 metric tons (mt), up 6% from a year ago, valued at $727.4 million – up 10% and the second-highest monthly total on record. For January through October, beef exports totaled 1.13 million mt, up 9% year-over-year, while value was up 17% to $6.92 billion. For beef muscle cuts only, exports increased 12% in volume (867,714 mt) and 19% in value ($6.19 billion).

USMEF said exports accounted for 13% of total beef production in October, which was steady with last year, and 11.6% for muscle cuts only (down slightly). For January through October, exports accounted for 13.5% of total production and 11.1% for muscle cuts – up from 12.8% and 10.2%, respectively, last year. Beef export value equated to $317.53 per head of fed slaughter in October, up 5% from a year ago. For January through October, the per-head average was up 15% to $320.50.

“Demand for U.S. beef continues to climb in nearly every region of the world, with annual records already falling in some markets,” said Dan Halstrom, USMEF president and chief executive officer. “Per-head export value will also easily set a new record in 2018, which illustrates the strong returns exports are delivering for cattle producers and for the entire supply chain.”

USMEF relayed that October pork export volume was 207,725 mt, the largest since May but still 2% lower year-over-year, reflecting smaller variety meat exports. Export value ($536.5 million) was also the largest since May but still down 5% from a year ago. For January through October, pork exports were 1% above last year’s record pace at 2.02 million mt, while value was also up 1% to $5.33 billion. For pork muscle cuts only, January-October exports increased 5% from a year ago in volume (1.63 million mt), valued at $4.43 billion (up 2%).

October exports accounted for 23.6% of total pork production, down from 25.4% a year ago. USMEF noted. For muscle cuts only, the percentage exported was 20.7% – down from 21.6% in October 2017. For January through October, pork exports accounted for 25.8% of total production, down from 26.4% last year, but the percentage of muscle cuts exported increased from 22% to 22.5%. Export value per head slaughtered was down 10% from a year ago in October to $46.07. The January-October average was $51.74, down 2%.

“Despite some very significant obstacles, global demand dynamics for U.S. pork remain strong,” Halstrom said. “We are hopeful that the events of the past week – the signing of the U.S.-Mexico-Canada Agreement and the return of trade negotiations between the U.S. and China – represent progress toward elimination of retaliatory duties imposed by key trading partners. If we can put that situation behind us, U.S. pork is well-positioned to regain the momentum displayed early in the year.”

Halstrom added that upcoming trade negotiations with Japan are critical for the U.S. pork and beef industries, as all major competitors in the Japanese market will soon benefit from significant tariff reductions. USMEF, along with producers, exporters and other industry organizations submitted comments to the Office of the U.S. Trade Representative (USTR) underscoring the importance and urgency of these negotiations and will convey these points again in USTR’s Dec. 10 public hearing.

New value records for U.S. beef in Korea, Taiwan, the Philippines

According to USMEF, beef exports to South Korea, which had already set a new annual value record through September, remained on a torrid pace as October exports reached 20,171 mt (up 17% from a year ago) valued at $153.1 million (up 25%). January-October exports were up 35% in volume (200,666 mt) and 47% in value ($1.44 billion). These results included a 21% increase in chilled beef exports to 44,440 mt, valued at $431 million (up 31%). While Korea’s imports from Australia and New Zealand have also edged higher in 2018, U.S. beef’s market share has increased sharply, jumping from 49% to 53%.

October beef exports to leading market Japan were up 12% from a year ago in volume (26,954 mt) and 13% higher in value ($166.8 million). For January through October, exports to Japan were up 7% from a year ago in volume (279,825 mt) while value increased 10% to $1.76 billion. Chilled beef exports to Japan were down 1% to 123,712 mt, but value increased 8% to $990 million.

According to USMEF, other highlights for January through October U.S. beef exports included:

Beef exports to Taiwan were up 34% from a year ago in volume (49,135 mt), while value reached $455.3 million – up 36% and already easily surpassing last year’s annual record of $409.7 million. Chilled exports to Taiwan were up 30% in volume (19,878 mt) and 35% in value ($249 million), as the U.S. captured more than 75% of Taiwan’s chilled beef market – the highest market share of any Asian destination.

Exports to the Philippines soared 29% in volume to 14,751 mt and reached $72.4 million in value – up 35% and setting a new annual record. Solid growth in Vietnam also helped push beef exports to the ASEAN region 14% ahead of last year’s pace in volume (39,719 mt) and 26% higher in value ($218.1 million).

Exports to Mexico were up 1% from a year ago in volume (199,003 mt) and 8% higher in value ($879.2 million). Beef muscle cut exports to Mexico have shown particularly strong momentum in 2018, increasing 8% in volume (118,177 mt) and 11% in value ($691.6 million).

Although October volume trended lower, January-October exports to China/Hong Kong were still 4% ahead of last year’s pace in volume (102,545 mt) and 24% higher in value ($823.5 million). This included exports to China of 5,677 mt valued at $48.6 million.

Growth in the Dominican Republic, Jamaica and the Bahamas contributed to a 9% increase in the Caribbean region as exports reached 21,455 mt. Value was up 4% to $135.4 million.

USMEF reported that pork exports to South Korea continued to gain momentum in October, increasing 27% from a year ago in volume (19,588 mt) and 17% in value ($49.2 million). January-October exports to Korea increased 41% in volume (191,610 mt) and 44% in value ($538.4 million) – already topping the annual records set in 2011. Even as imports from all main suppliers have expanded this year, U.S. share of Korea’s pork imports has increased significantly, rising from 36% to 39%.

October pork exports to leading value market Japan totaled 35,134 mt, up 8% from a year ago, while export value climbed 9% to $146.6 million. This pushed January-October exports 2% ahead of last year’s pace in volume (330,480 mt) and 3% higher in value ($1.36 billion). This included a slight decrease in chilled pork volume (176,118 mt) while value was up 2% to $849 million. U.S. share of Japan’s pork imports held close to 35%, down slightly from last year. But Japan imported a record volume of ground seasoned pork from the European Union in October and U.S. share in that category has dropped from 71% to 65% in 2018. USMEF said this trend is likely to continue with upcoming implementation of the Japan-EU Economic Partnership Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which will reduce tariffs on all pork and phase the import duty on ground seasoned pork to zero over the next six years.

Led by strong growth in the Philippines and Vietnam, October pork exports to the ASEAN region increased 91% in volume (9,009 mt) and 59% in value ($22 million). January-October exports increased 46% in volume (58,415 mt) and 33% in value ($145.5 million). This was fueled in part by a surge in pork variety meat exports to the region, which more than doubled in both volume (24,090 mt, up 149%) and value ($39 million, up 126%).

Other January-October results for U.S. pork exports included:

Pork exports to South America, led by strong growth in Colombia and Peru and a rebound in exports to Chile, reached 106,444 mt – up 25% and already surpassing last year’s annual record. Export value was up 19% to $259.9 million.

Although October results slowed from a year ago, January-October exports to Central America still increased 17% in volume (66,428 mt) and 13% in value ($156.6 million). Exports increased to leading markets Honduras and Guatemala and were sharply higher to Panama, El Salvador, Nicaragua and Costa Rica.

Exports to the Dominican Republic have already exceeded annual records in both volume (36,022 mt, up 36%) and value ($78.4 million, up 29%).

Exports to Australia were up 10% to 61,994 mt, with value climbing 8% to $178.8 million. Australia is a critical market for U.S. hams, especially with retaliatory duties in place in Mexico and China, USMEF said.

Despite a fifth straight month in which pork shipments were below year-ago levels, exports to leading volume market Mexico were still steady with last year’s record pace at 656,284 mt. But export value, pressured by the retaliatory duties first imposed in June, declined by 9% to $1.12 billion.

Exports to China/Hong Kong declined 27% from a year ago to 302,151 mt, with value dropping 16% to $730 million. China/Hong Kong is the largest destination for pork variety meat exports, which were down 28% in volume (194,472 mt) and 15% in value ($512.4 million).

Lamb exports solid in October

October exports of U.S. lamb more than doubled from a year ago to 1,161 mt (up 107%). Export value was also strong, climbing 48% to $1.96 million. Lamb muscle cut exports were 207 mt in October, up 20% from a year ago, valued at $1.13 million (up 27%).

Through the first 10 months of the year, lamb exports were 69% ahead of last year’s pace in volume (10,371 mt) and 19% higher in value ($19 million).

USMEF said that while the increase is mainly attributable to stronger variety meat demand in Mexico, muscle cut exports were sharply higher to the Bahamas, the Dominican Republic, the United Arab Emirates, Taiwan and the Philippines.